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Federal Budget 2012 – A Preview

What is the Budget?

The Budget is the Government’s annual financial report. It outlines planned expenditure, and comprises the Treasurer’s speech, the main appropriation bills allowing the allocated spending of public money and other legislation to bring about financial proposals in the Budget Speech.

Producing a surplus is no easy feat. Photo: Alex Ellinghausen

Context

Treasurer Wayne Swan has promised a surplus in this year’s federal budget, fulfilling a pledge he made two years ago when growth forecasts favoured a 2012-13 surplus.

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Structural Changes in the Australian Economy: Part 1

Part 1 – The Modernisation of China, Our Commodities Boom, and Structural Adjustment. 
 
This article is the first of a series of macroeconomic analyses which I’ll be conducting on the changing structure of the Australian economy. In recent years, economic commentators and policymakers alike have been uttering the words “structural change” faster and more often than the RBA can say: “At its meeting today, the Board decided to…” As this term is likely to remain on everyone’s lips in the foreseeable future, it’s high time to make sense of it. We’ve all heard statements being thrown around like “once-in-a century terms of trade”, “two-speed economy”, and even “Dutch Disease”.

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The Carbon Tax: Tony Abbott’s Ticking Time Bomb

On the 9th July 2010, Prime Minister Julia Gillard announced the Government’s intention to introduce a ‘carbon tax’ in order to put a price on pollution and thereby give firms an incentive to reduce carbon emissions. The carbon tax passed the House of Representatives and the Senate on the 12th October 2011 and the 8th November 2011 respectively, and consequently on the 1st July 2012 a tax of $23 per tonne of carbon emissions will come into effect.

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Australia’s Household Saving Ratio – Is the cautious consumer still at large?

In recent years, Australian households have been saving a significantly larger proportion of their disposable income than in the previous two decades. Although the December quarter’s National Accounts data revealed a slight easing in the household saving ratio, the overall picture remains the same. Following a significant spike in December 2008, Australia’s household saving ratio has remained elevated at levels not seen in over two decades. Is this the corollary of the ‘cautious consumer’? Or does it merely reflect a return to more normal patterns of behaviour?

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'Black hole' in the system threatens good public policy, Moran Says: Deakin Policy Forum 2012

By Joan Wu, ESSA Events Director 2012
Terry Moran, former Labour secretaryDuring a speech at the Deakin Policy Forum this week, Terry Moran called for more accountability and transparency in our troubled system of government. Moran, former secretary to Prime Ministers Kevin Rudd and Julia Gillard, was quick to emphasise that it is not the quality of civil service, which is exemplary, but rather the nature of parliamentary democracy in the current system that is to blame.

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Wayne Swan’s Ironic Attack on Billionaire Miners for his Own Self-Interest

Source: Timeshift9

Wayne Swan’s essay in The Monthly titled ‘The 0.01 Per Cent: The Rising Influence of Vested Interests in Australia’ has caused quite a stir in the last few weeks. Swan laments the rising influence of wealthy vested interests in Australia’s public policy debate, and warns of it undermining our equality and democracy. These are strong, politically-potent words from Australia’s Treasurer, and have brought interesting reactions from the opposition, the media, the mining industry magnates he attacked, and the general public.

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Party Politics Trumps Policy Detail

George Megalogenis’ quarterly essay titled ‘Trivial Pursuit: Leadership and the end of the reform era’ highlights the worrying lack of political leadership on both sides of the parliament in the aftermath of the 2010 Australian federal election. It argues that political short-termism and party politics has become the order of the day, leaving proper policy debate and detailed analysis out of the picture. It means that governments are focussing on winning the next 24-hour news cycle, or the next opinion poll rather than focussing on creating an enduring economic reform agenda that builds on our prosperity in Australia. Many prominent Australian journalists, including Megalogenis and Annabel Crabb of the ABC, have vowed not to discuss opinion polls to reflect their distaste of the current political atmosphere.

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Will Market Confidence Fall Amid Labor Struggles?

The Labor governments leadership struggles over the past week has fixated the nation. On 22 February, following weeks of reports of tension, Kevin Rudd stepped down as Foreign Minister. The next day Julia Gillard called a leadership ballet and by 23 February Rudd confirmed he would contest the leadership. Opinions polls have shown Rudd to be preferred Prime Minister to Gillard however whom the caucus prefers is still mere speculation.

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Struggles of the Australian Retail Sector

Source: Benson Kua

I was watching an episode of one of my favourite political TV shows, The Drum (Mon-Fri, ABC News 24 at 6pm) when Dick Smith was introduced as the program guest. I watched with bewilderment as Smith began ranting and raving – it went something like this:
“(without the GST revenue from electronic retail sales) we won’t have the money to pay decent wages to our nurses…our police, you won’t be able fund the ABC in a decent way, this money is gone forever.”

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